Forex market has its driving forces. Such forces are participants of market. For clarity, it is accepted to divide them into several types: bulls, bears, pigs, rabbits, hogs, lambs. In this zoo, driving forces are exactly bulls and bears. Their clear intentions and determination can greatly influence currency rates. This terminology was adopted from stock market, where emotions play not the last role in movement of quotes, thus, analogy with animals and their typical behaviour provides a clear idea on psychology of market participant.
To reduce false signals, it is recommended to define the market trend beforehand. It can be done with the help of other indicators (for example, ADX, MACD etc.) and with the help of other proven methods. Under a bullish trend, crossing of line from top to bottom in most part of cases indicates the beginning of the correction. it is not recommended to sell against trend.
Forex market has its driving forces. Such forces are participants of market. For clarity, it is accepted to divide them into several types: bulls, bears, pigs, rabbits, hogs, lambs. In this zoo, driving forces are exactly bulls and bears. Their clear intentions and determination can greatly influence currency rates. This terminology was adopted from stock market, where emotions play not the last role in movement of quotes, thus, analogy with animals and their typical behaviour provides a clear idea on psychology of market participant.
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